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Rents Rise Faster Than House Prices

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Someone called Mr Brown ramping "buy to let" whilst failing to notice it's cheaper to rent than buy.

http://www.telegraph.co.uk/finance/personalfinance/investing/7720555/Rents-rise-faster-than-house-prices.html

The average rent rose to £663 a month in April, 2.2pc higher than a year ago. The monthly increase for rent was 0.6pc, compared to just 0.4pc growth in house prices.

This was the third consecutive monthly raise, according to research conducted by LSL Property Services, which owns the UK's largest lettings agent network.

Rent is now just £25 less than it was at its peak in August 2008, meaning buy-to-let properties are now yielding an average of 4.8pc.

David Brown, of LSL Property Services said: "Despite the distraction of the election, the buy-to-let market has gone from strength to strength, and landlords have seen their highest rents and yields this year.

"The UK's political uncertainty surrounding the hung parliament – and its potential impact on the economy – will continue to depress demand for house purchase.

"With transactional levels subdued, the private rental sector will play an even more pivotal role in providing accommodation for hesitant buyers, and we expect tenant demand and rents to be boosted in the medium-term."

House price growth has dropped significantly since the beginning of the year, which saw a monthly increase to January of 2.1pc.

The buy-to-let market is outstripping private property significantly, with the average annual return reaching 12.8pc for landlords, resulting in an income of £19,765 in the past year- £7,115 in rent, and £12,650 in capital appreciation. Annual returns have increased for fourteen consecutive months.

Returns have been boosted by a decline in tenant arrears- with just 9.7pc of all rent not being paid. This was the lowest proportion since LSL began compiling figures two years ago, and a significant drop of £7m from March.

Mr Brown concluded: "Not only has the buy-to-let market emerged from lingering effects of the recession, but landlords are now within touching distance of the record rents they achieved before the downturn.

"Supply and demand imbalances have corrected, and landlords are now getting a few pounds less each per month than they did at the peak of 2008."

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Gosh a whopping 4.8% average yield - fill yer boots!

Personally I'm quite happy for rents to increase if it means supply is decreasing - ie supply of property for sale is increasing = price falls.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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